In this video we walk through our recent Aave governance proposal. The first 12 minutes provide a high-level summary of our proposal whereas the next 23 minutes dive into more of the detail and specifics.
We believe this proposal is important because it moves Aave from being a credit facility to becoming a true credit protocol where users can permissionlessly come together to launch, govern and manage money markets.
It does this by eliminating the system-wide safety pool and replacing it with sharded safety pools in the form of aaveDAOs (aDAOs). Each aDAO governs its own money markets and underwrites the specific risks associated with those money markets. Crucially, while the aDAOs govern and backstop risk for their own money-markets, the user always interacts with the Aave front-end and smart contracts. Aave thus controls the user relationship and TVL, increasing fork-resistance and network effects.
With complexity being abstracted away from end-user